The internet of tomatoes is coming, starting with Boston salads

(Bloomberg) -- Intrigued by how blockchain was changing finance, an ex-banker at Wells Fargo & Co. and a former executive at Nasdaq Inc. began looking for other opportunities. They looked at applying the technology to insurance, law, even music.

Then they hit on farming.

Raja Ramachandran and Phil Harris met when they were both working on Wall Street, in 2005 after Citigroup Inc. acquired electronic trading company Lava Trading. The pair remained friends for more than a decade, and decided to leave finance to start Ripe.io, which uses blockchain in agriculture, and has big aspirations to weave it through the food supply chain.

“We left financial services to find a more meaningful application of blockchain. We knew it was going to be profound,” said Harris. As Ramachandran put it, they “stumbled on food.”

The next step for Ripe was a pilot project on Ward’s Berry Farm, a 180-acre farm southwest of Boston, where the fields overflow with carrots, baby beets, bok choy, chard, kale, cabbage, sweet potatoes, onions, radishes, fava beans, squash, pumpkins and zinnias, which farmer Jim Ward keeps in rotation because his wife loves it when he brings them home to her in a fresh bouquet.

Added to that lineup this year: blockchain tomatoes. Beginning in August, their ripeness, color and sugar content were tracked step by step, reducing spoilage and documenting the supply chain.

Controlling Variables

“My job is to gain control of as many variables as I can,” Ward said on a recent blustery fall day on his farm in Sharon, Massachusetts. Standing in a field of vines studded with sensors connected to a solar-powered device that routes information to the cloud, Ward plucked a tomato and popped it into his mouth. “Flavor and quality is what my business is,” he said.

Ripe partnered with farm-to-counter salad franchise Sweetgreen Inc. to show blockchain can be used to track crops, yielding higher-quality produce and putting better information in the hands of farmers, food distributors and restaurants.

The biggest player in this area is International Business Machines Corp., which partnered with food titans including Dole Food Co., Nestle SA, Unilever NV and Wal-Mart Stores Inc. this summer on a pilot to add blockchain to their businesses. IBM says its technology can show where produce came from in seconds. Traditional methods can take up to a week.

The experiment on Ward’s farm this summer was designed to test whether the same principle could work for boutique restaurants committed to knowing the origins of all of their ingredients. Sweetgreen already uses tomatoes grown on Ward’s farm in salads sold at its Prudential Center location in Boston. In their pilot program with Ripe, tomatoes were tracked using Analog Devices Inc. and Blustream Corp. sensors, and some were taste tested against “normal” tomatoes from Ward’s farm.

Light, Humidity

Ripe tracked 200 tomatoes on 20 different plants, in red Sweet 100 and orange Sungold varieties, in both early and late-season fields. Sensors recorded environmental factors including light, humidity and air temperature. In the buckets of tomatoes loaded on to trucks for distribution, another set of sensors logged the humidity where they were stored.

In finance, blockchain is being tested by firms including Digital Asset Holdings LLC, a software startup run by former JPMorgan Chase & Co. executive Blythe Masters. The company has raised more than $110 million in funding, according to an October statement, and its roster of clients includes the Australian Stock Exchange and Depository Trust & Clearing Corp. Separately, more than 100 financial institutions are working within the R3 consortium to explore uses for blockchain to track money transfers and other kinds of transactions.

While an easy-to-use database is key to managing a complex supply chain, skeptics say it doesn’t necessarily need blockchain. The technology also requires adaptation. While bitcoin exists only on a blockchain, tomatoes exist in the real world. At most, what Ripe can provide is a detailed record of their qualities and condition at each step of the growing and distribution process.

No Cure-All

For those reasons, blockchain isn’t an immediate cure-all, said Charles Cascarilla, CEO and co-founder of Paxos, a blockchain company that caters to financial institutions.

“It’s a tool, and you have to apply it to the right set of problems,” he said. “What it tends to be very good for is knowing who owns what and when,” Cascarilla added. “It’s not a magic bullet.”

Caroline Myran, a project manager for Ripe, spent time on Ward’s farm scanning tomatoes with a special device that tracks each tomato’s salt and sugar content and pH levels. An app on her phone assigns them a “quality factor.” A lifelong farmer herself, Myran holds a master’s degree in sustainable agriculture and food systems from University of Massachusetts at Amherst.

Ripe is still in its infancy, meaning it has a long way to go from proving its concept to generating meaningful business. It didn’t earn revenue from the pilot program.

Champagne, Vidalia

Beyond quality, the sensor and blockchain tracking system can also prove where an agricultural product came from, she said. For instance, if you wanted to know if the grapes used to make your Champagne were really from Champagne, France, or the Vidalia onions you’re sautéing are really from Vidalia, Georgia, a blockchain could prove a product’s authenticity.

“There’s a lot of fraud in food origins, especially now that it’s hot,” Myran said. “People say ‘this is local,’ or ‘this is organic,’ or ‘this is grown using certain practices.’ With this system, you can prove it.”

Back in a cafe near Manhattan’s Union Square, Sweetgreen co-founder Jonathan Neman said the project could potentially apply to all kinds of produce, seasons and farms. Tomatoes were just a test.